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What Temporary Help Agencies and their Clients Need to Know

The Temporary Help Agency provisions of the Employment Standards Act, 2000 (ESA) affect how temporary help sector agencies and their clients operate.

Who must comply with this law?

Both temporary help agencies that assign their employees to peform work for agency clients and agency clients that use temporary help agency assignment employees to perform work should be aware of the provisions in the ESA and must follow them. It’s the law.

Definitions

Temporary help agency” means an employer that employs persons for the purpose of assigning them to perform work on a temporary basis for clients of the employer.

Assignment employee” means an employee employed by a temporary help agency for the purpose of being assigned to perform work on a temporary basis for clients of the agency.

Client”, in relation to a temporary help agency, means a business that enters into an arrangement with the agency under which the agency agrees to assign or attempt to assign one or more of its assignment employees to perform work for the business on a temporary basis.

Permanent hiring

A temporary help agency can not restrict a client from permanently hiring one of its assignment employees. In addition, a temporary help agency may charge a client business that hires one of the agency’s employees a “Temporary-to-Permanent” fee only during the six month period beginning on the day the temporary help agency employee first started working for the client. These rules apply regardless of whether the assignment employee is hired (or wishes to be hired) by the client as a temporary, full-time or part-time employee.

Fees that cannot be charged to employees

Temporary help agencies cannot charge an assignment employee a fee to become an assignment employee, a fee for the agency to find or attempt to find assignments for the employee, a fee for preparation for job interviews, a fee to prepare a resumé or a fee if the assignment employee is hired by the client to be an employee of the client.

Job references for temporary employees

A temporary help agency cannot restrict a client from providing an assignment employee with a reference.

Mandatory information for assignment employees

Information about the agency

As soon as possible after hiring an assignment employee, a temporary help agency is required to provide the employee with the legal name of the agency, the business or operating name if that is different than its legal name, its address and telephone number and the name of at least one agency contact.

Information about assignments

Temporary help agencies must provide assignment employees with information about an assignment when the assignment is offered to the employee. This includes the client’s legal name and business or operating name if that is different from the legal name, its address, telephone number and the name of at least one contact, the hourly wage rate or commission, as applicable, benefits associated with the assignment, the hours of work associated with the assignment, estimated term of the assignment, a general description of the work and the pay period and pay day.

Information about the ESA

Temporary help agencies must provide each assignment employee with the Information sheet titled Your Employment Standards Rights: Temporary Help Agency Assignment Employees, published by the Director of Employment Standards, which outlines assignment employees’ ESA rights.

The Employment Standards Poster

Changes in the law that came into force on May 20, 2015 required employers to provide any employees who are covered by the ESA, including assignment employees of temporary help agencies, with a copy of the ministry’s Employment Standards Poster entitled Employment Standards in Ontario. Employers are required to provide any employees who were employed on May 20, 2015 with a copy of the most recent version of the poster by June 19, 2015. Employers are required to provide any employees hired after May 20, 2015 with a copy of the most recent version of the poster within 30 days of the date they are hired.

If an employee requests a copy of the poster in a language other than English and the ministry has published a version in that language, the agency must provide the translated version in addition to the English copy.

English and French versions of the poster are available at Ontario.ca/ESAposter and multilingual versions are available at Ontario.ca/employmentrights.

Reprisals

Temporary help agencies and client businesses may not penalize assignment employees for asserting their rights under the ESA. For more information visit the Reprisals chapter in Your Guide to the Employment Standards Act, 2000, available at Ontario.ca/ESAguide.

Public holidays

Assignment employees are generally entitled to take public holidays off work and to be paid public holiday pay for the day. Assignment employees have the right to public holidays as soon as employment with the temporary agency begins and whether or not they have been assigned to perform work for a client of the agency. Public holiday pay for a public holiday is calculated by adding up all of the regular wages earned plus any vacation pay payable in the four work weeks before the work week with the public holiday and then dividing by 20.

For more information visit the Public Holidays chapter in Your Guide to the Employment Standards Act, 2000, or try the Public Holiday Calculator available at Ontario.ca/ESAtools.

Termination

The temporary help agency, as the employer, has the obligation to provide notice or pay in lieu when terminating the employment of any assignment employee who has been employed for at least three months.

Generally, the notice required when an employee’s employment is terminated ranges from one week (for those employees whose period of employment is less than a year) to eight weeks (for those whose period of employment is eight years or more). The period of employment is based on the length of the employee’s relationship with the agency, not the duration of any particular assignment.

There are special rules for the temporary help sector regarding lay-offs and how a lay-off may trigger a termination of employment. There are also special rules for the temporary help agency sector regarding mass terminations. Temporary help agency assignment employees are entitled to mass notice of termination ranging from eight weeks to 16 weeks when 50 or more assignment employees are terminated by an agency in the same four-week period as a result of assignments ending at a single client’s establishment (not at the establishment of the agency itself).

For more information visit the Temporary Help Agencies and Termination of Employment chapters in Your Guide to the Employment Standards Act, 2000. You may also wish to try the Termination Tool and the Special Rule Tool.

Severance

Most assignment employees have a right to severance pay if their employment is severed and they have been employed for at least five years. (The five years is based on the total time spent in employment with the agency, not the duration of any particular assignment.) There are special rules for the temporary help sector regarding lay-offs and how a lay-off may trigger a severance of the employment relationship.

The temporary help agency, as the employer of its assignment employees, will have severance pay obligations if its payroll is $2.5 million or more or if it severs the employment of 50 or more employees in a six-month period because of a permanent discontinuance of all or part of its business. The severance pay entitlement is equal to one week’s pay for each complete year of employment plus 1/12 of a week’s pay for each complete month that is not part of a complete year, to a maximum of 26 weeks’ pay. For more information visit the Severance Pay chapter in Your Guide to the Employment Standards Act, 2000. You may also wish to try the Severance Tool.

For more information

If you have questions about the ESA, call the Ministry of Labour’s Employment Standards Information Centre at 416-326-7160, toll free at 1-800-531-5551, or TTY 1-866-567-8893. Information is available in multiple languages.

Information on the ESA can also be found at the Employment Standards section of the Ministry of Labour's website.

To access the Employment Standards Act, 2000 visit the Ontario government e-Laws website.